Open Source—especially Linux—isn’t what it used to be 30 years ago. Back then, it was mostly a niche for highly skilled tech enthusiasts. Today, it’s grown into a multi-billion-dollar industry that plays a major role in powering the world’s information infrastructure.
As you know, there are a few big names in the Linux ecosystem’s business space. One of the most prominent, Canonical (maker of the Ubuntu distribution), has just released its financial report for 2024.
The company, headquartered in London, has reported strong financial performance for the year ended December 31, 2024, with revenue rising to $292 million, up from $251 million in 2023.
The company achieved a gross margin of 83%, marking a three-percentage-point improvement over the previous year. Operating efficiency also improved, with cash flows from operating activities before taxes nearly doubling to $85 million, compared to $46 million in 2023.
Notably, while Canonical slightly reduced its sales and marketing expense from 21% to 20% of revenue, it increased investment in research and development to 27% of revenue, reinforcing its focus on innovation.
General and administrative expenses remained stable at 15% of revenue. The company also expanded its workforce, with the average headcount increasing to 1,175 from 1,034 employees.
Subscription revenue climbed to $235 million (from services like Ubuntu Pro), reflecting a robust 19% year-over-year growth from $197 million. Revenue from professional services also saw an uptick, increasing to $56 million from $53 million.
According to data, Ubuntu’s main market is the US, which generates about 80% ($232 million) of the company’s total revenue. Europe also saw a sharp rise, contributing $38 million, compared to $20 million the previous year.
Interestingly, revenue from the rest of the world declined markedly, dropping to $20 million from almost $34 million.
So, what do all these numbers tell us? Generally, the company is moving in the right direction and slowly and methodically achieving its main goal—generating profit with a clear focus on the enterprise segment.
Most likely because of this shift, Ubuntu—once the clear go-to for the average home user—has gradually lost ground in that space. Over the years, its strong focus on the business market, often at the expense of community feedback, opened the door for other distros to step in. One of the most notable examples is Linux Mint, which has since become a preferred choice among home users.
Lastly, the Canonical Board expressed satisfaction with the company’s performance and strategic direction. If you’re interested, you can find Canonical’s complete 75-page financial report for 2024 at this link.
Good hopefully they continue to increase revenue well into the future.